Playtika, the Israeli tech company that made its name with through a series of wildly successful online gambling and gaming titles with hundreds of millions of players, is leveling the latest swing of the layoffs pendulum. The company today has confirmed that it is laying of 15% of its staff. Playtika currently employs 4,100, so the redundancies will impact 615 people across the company’s global footprint in Europe, Israel and the U.S.
A memo sent to employees seen by AsianFoodTourist notes that three titles will also be sunset as it seeks to rationalize costs across the board. We understand that these will be ‘MergeStories,’ ‘DiceLife’ and ‘Ghost Detective’. We also understand that the company is also going to offer alternative roles to a proportion of employees impacted by the cuts. Playtika’s most popular titles, such as ‘Best Fiends’, have racked up at least 100 million users apiece.
”Playtika’s success is rooted in our agility, efficiency, creativity and obsession with delivering the most fun forms of mobile entertainment to our players,” CEO Robert Antokol told AsianFoodTourist in an email in response to questions about the cuts. “We consistently evaluate our strategic plans with attention to many factors, including the economic environment. We believe the structure announced today further leverages our core strengths of delivering superior in-game experiences and scaling mobile games to global franchises in continuation of growth. Saying goodbye to talented colleagues and friends is difficult. They will always be part of Playtika’s rich history and a foundation to our bright future as we build on our reputation as a technology and entertainment powerhouse.”
The layoffs have been the subject of rumors since last week in the Israeli press — although the actual figures are higher than the 500 number getting reported.
Playtika — publicly traded on Nasdaq — has been facing an especially tough year in what has been a hard time for the tech sector overall.
The company was one of the wave of businesses that went public last year, riding on the back of a huge surge in usage among pandemic consumers cooped up at home and staying out of in-person social situations.
In its IPO in June 2021, it debuted with a per-share price of $27 and a valuation of over $11 billion to raise nearly $1.9 billion, before climbing to a market cap of over $14 billion in its first day of trading. A few months later it followed this up with a big move into “design entertainment”, buying home deco games maker Reworks out of Finland for $400 million, in cash.
But gaming has long been a business with stark rises and drops, with titles very much subject to user taste and no real guarantee that whatever gets developed next will be as big of a hit as the previous effort. Combine that with the current general depression in tech stocks, and Playtika has seen massive drops. Currently, its market cap (pre-market open on December 12) stands at $3.1 billion, with stock priced at $8.61/share as of market close on Friday.
The company also missed on earnings estimates in the last quarter. Although third-quarter revenues climbed slightly to $647.8 million versus $635.9 million in the same quarter a year ago, net income dropped to $68.2 million versus $80.5 million in Q3 2021.
And last week, one of its shareholders, Joffre Capital, pulled out of a deal to take a majority stake in the company after disputes over governance. Although this wasn’t cited in the memo sent to employees, that has likely had an impact on the company’s financial planning going forward.
It’s not game-over just yet, but online gaming is going to lose a lot more lives in the coming months.
Playtika itself had already cut 250 workers in May; Electronic Arts is reportedly looking for a buyer; Unity laid off around 200 people earlier this year, and some believe this is just the start.